South African employees can be fired for the misconduct of their colleagues, however, the decision must be legally fair and just.

According to Jacques van Wyk and Michiel Heyns from Werksmans Attorneys, the retail sector often suffers from stock losses or shrinkage, with employers constantly struggling to identify perpetrators. The employer may then want to charge a group of employees with collective misconduct.

This issue was seen at the Labour Appeal Court (LAC) in South African Commercial Catering and Allied Workers Union and Others v Makgopela and Others (“SACCAWU v Makgopela“).

In this case, 12 employees (represented by a trade union) worked in various roles at a retailer. Following stock takes from January to March, the employer noticed alarming stock losses.

In response, the employer held two “shrinkage workshops” for employees in March and June 2016, where the employees were interviewed and given questionnaires about the stock losses, which revealed several deficiencies in the store’s systems.

The employees were charged with collective misconduct, and following a disciplinary hearing, all employees were found guilty of misconduct and fired.

They took their complaints to the Conciliation, Mediation and Arbitration (CCMA). Still, the commissioner said they had implicated each other during the shrinkage workshop questionnaire by referring to others who were not doing their duties.

“Had they disclosed the cause of the stock losses, they could have been prevented. Their dismissals were found to be both procedurally and substantively fair,” the experts said.

The Labour Court dismissed a review application after finding the arbitration award reasonable.

LAC Decision

On appeal, the LAC said there were four types of collective misconduct in South Africa.

Firstly, the doctrine of common purpose occurs as a consequence of the deemed participation of an employee as part of a group that committed the primary misconduct.

There is also team misconduct, where several employees are collectively dismissed as the individual responsibility of individual employees in a team cannot be determined, with each team member seen as failing to ensure that the employer’s standards are met.

There is also derivative misconduct, where an employee elects not to disclose information regarding their colleague’s misconduct despite being expressly required to do so.

Finally, there is collective misconduct, which mainly occurs when the individual capability of employees cannot be determined, and there is an operational justification for their dismissal.

Following analysis, the LAC said that the employees’ dismissals were unfair for the following reasons:

• The employer relied on team misconduct, the essence of which related to the failure of the employees as members of a team to adhere to its rule to prevent and halt shrinkage at its store;

• The issue was whether it was shown that the employees, as members of a team, had culpably failed to ensure that the team complied with the rule or attained the performance standard set by the employer to prevent shrinkage;

• To prove this required the employer to rely on direct evidence of the failure on the part of the employees as members of the team to adhere to the rule or performance standard sufficient to warrant a finding of team liability; and

• The employer failed to do so.

The LAC distinguished the current matter from other instances which have been found to justify the dismissal of all employees in a team for, among others, the following reasons:

• No evidence was presented by the employer as to the details of the systems and controls in place at its store to prevent stock losses;

• There was no evidence of any attempt to ascertain through an investigation how stock was being lost or from which part of the large store this was occurring, including relying on CCTV footage or available documentary evidence;

• There was also no evidence which indicated that, given the size of the store, employees in one section of the store would have been aware of stock being lost in another section; and

• The evidence indicated that employees performed diverse functions across the large area of the store and that when they raised a number of concerns and made proposals for system improvements to prevent such losses, these were not acted upon by the employer. The employees therefore did not remain silent.

The case is important as it shows that caution must be taken when reliance on collective misconduct is used for firing employees.

“Our law does not allow a determination of guilt simply by association. Where team misconduct is relied upon, there must exist either a factual basis or sufficient grounds for inferring that all employees were indivisibly culpable as members of the team for failing to ensure compliance with the employer’s rule,” the court said.

“A reliance on generalised facts, arising from a scant investigation into the alleged misconduct, does not provide a sufficient basis on which to infer that collective responsibility exists.”

---

Read: Massive payday for South Africa’s richest man